Raise Wages, Cut Carbon Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3966 To amend the Internal Revenue Code of 1986 to reduce social security payroll taxes and to reduce the reliance of the United States economy on carbon-based energy sources, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 25, 2019 Mr. LIPINSKI (for himself and Mr. ROONEY of Florida) introduced the fol- lowing bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, Education and Labor, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to reduce social security payroll taxes and to reduce the reliance of the United States economy on carbon-based energy sources, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Raise Wages, Cut Car- 4 bon Act of 2019’’. 5 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 3966 IH SEC. 2. INCREASE IN THE LOW-INCOME HOUSING ENERGY 1 ASSISTANCE PROGRAM AND THE WEATHER- 2 IZATION ASSISTANCE PROGRAM. 3 (a) LIHEAP.—On October 1, 2020, and each Octo- 4 ber 1 thereafter, there shall be made available, without 5 further appropriation or fiscal year limitation, to carry out 6 the Low-Income Home Energy Assistance Act of 1981 (42 7 U.S.C. 8621 et seq.) an amount equal to 5 percent of the 8 net revenues received in the Treasury during the previous 9 fiscal year from the taxes imposed under parts II, III, and 10 IV of subchapter E of chapter 38 of the Internal Revenue 11 Code of 1986. 12 (b) WEATHERIZATION ASSISTANCE PROGRAM.—On 13 October 1, 2020, and each October 1 thereafter, there 14 shall be made available, without further appropriation or 15 fiscal year limitation, to carry out the weatherization as- 16 sistance program established under part A of title IV of 17 the Energy Conservation and Production Act (42 U.S.C. 18 6861 et seq.) an amount equal to 1 percent of the net 19 revenues received in the Treasury during the previous fis- 20 cal year from the taxes imposed under parts II, III, and 21 IV of subchapter E of chapter 38 of the Internal Revenue 22 Code of 1986. 23 (c) ADDITION TO OTHER AMOUNTS.—Amounts made 24 available pursuant to this section shall be in addition to 25 other amounts made available to carry out the Low-In- 26 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 3966 IH come Home Energy Assistance Act of 1981 and the 1 weatherization assistance program established under part 2 A of title IV of the Energy Conservation and Production 3 Act for the fiscal year involved. 4 SEC. 3. DISTRIBUTION OF CERTAIN ESTIMATED REVENUES 5 TO SOCIAL SECURITY BENEFICIARIES. 6 Not later than October 1 of each fiscal year beginning 7 with fiscal year 2020, the Commissioner of Social Security 8 shall pay an amount out of the general fund of the Treas- 9 ury, equal to 10 percent of the net revenues received in 10 the Treasury during the previous fiscal year from the 11 taxes imposed under parts II, III, and IV of subchapter 12 E of chapter 38 of the Internal Revenue Code of 1986, 13 to be distributed equally among each individual entitled 14 to monthly insurance benefits under title II of the Social 15 Security Act (42 U.S.C. 401 et seq.) or to an annuity 16 under section 2 of the Railroad Retirement Act of 1974 17 for the 1st month in such fiscal year. 18 SEC. 4. REDUCTION OF CERTAIN SOCIAL SECURITY TAXES; 19 TAX ON COMBUSTIBLE FOSSIL FUELS. 20 (a) IN GENERAL.—Chapter 38 of the Internal Rev- 21 enue Code of 1986 (relating to environmental taxes) is 22 amended by adding at the end thereof the following new 23 subchapter: 24 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 3966 IH ‘‘Subchapter E—Reduction of Certain Social 1 Security Taxes; Tax on Combustible Fos- 2 sil Fuels 3 ‘‘PART I—REDUCTION OF CERTAIN SOCIAL SECURITY TAXES ‘‘PART II—TAX ON COMBUSTIBLE FOSSIL FUELS ‘‘PART III—TAX ON CERTAIN ADDITIONAL IMPORTED PRODUCTS ‘‘PART IV—TAX ON FLUORINATED GREENHOUSE GASES ‘‘PART V—SUPERMAJORITY REQUIRED TO CHANGE REVENUE NEUTRALITY ‘‘PART I—REDUCTION OF CERTAIN SOCIAL 4 SECURITY TAXES 5 ‘‘Sec. 4691. Social Security taxes and benefits. ‘‘SEC. 4691. SOCIAL SECURITY TAXES AND BENEFITS. 6 ‘‘(a) AMOUNTS APPROPRIATED TO SOCIAL SECURITY 7 TRUST FUNDS.— 8 ‘‘(1) IN GENERAL.—There are hereby appro- 9 priated to the social security trust funds an amount 10 equal to the excess (if any) of— 11 ‘‘(A) net revenues received in the Treasury 12 from the taxes imposed by parts II, III, and IV, 13 over 14 ‘‘(B) the net expenditures from the Treas- 15 ury under sections 2 and 3 of the Raise Wages, 16 Cut Carbon Act of 2019. 17 ‘‘(2) ALLOCATION AMONG FUNDS.—Amounts 18 appropriated under paragraph (1) shall be allocated 19 among such funds as determined appropriate by the 20 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 3966 IH Managing Trustee of the Board of Trustees of the 1 Trust Funds (within the meaning of title II of the 2 Social Security Act), in cooperation with the Rail- 3 road Retirement Board. 4 ‘‘(b) REDUCTION IN CERTAIN SOCIAL SECURITY 5 TAXES.— 6 ‘‘(1) IN GENERAL.—The rate of each specified 7 social security tax for each calendar year (deter- 8 mined without regard to this section) shall be re- 9 duced by the number of percentage points equal 10 to— 11 ‘‘(A) such rate, multiplied by 12 ‘‘(B) the reduction percentage determined 13 by the Secretary for such calendar year. 14 ‘‘(2) REDUCTION PERCENTAGE.—The reduction 15 percentage determined by the Secretary under para- 16 graph (1) for any calendar year shall be the percent- 17 age which the Secretary estimates will result in ag- 18 gregate appropriations into each trust fund equal to 19 the amount which would (without regard to this sec- 20 tion) be appropriated to each trust fund for such 21 calendar year. 22 ‘‘(c) DEFINITIONS.—For purposes of this sub- 23 chapter— 24 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 3966 IH ‘‘(1) SPECIFIED SOCIAL SECURITY TAX.—The 1 term ‘specified social security tax’ means— 2 ‘‘(A) the tax imposed by section 3101(a) 3 (and so much of the tax imposed by section 4 3201(a) or section 3211(a) as is determined by 5 reference to the tax imposed by section 6 3101(a)), and 7 ‘‘(B) 1⁄2 the tax imposed by section 8 1401(a). 9 ‘‘(2) SOCIAL SECURITY TRUST FUND.—The 10 term ‘social security trust fund’ means— 11 ‘‘(A) the Federal Old-Age and Survivors 12 Insurance Trust Fund established by section 13 201(a) of the Social Security Act, 14 ‘‘(B) the Federal Disability Insurance 15 Trust Fund established by section 201(b) of the 16 Social Security Act, and 17 ‘‘(C) the Social Security Equivalent Ben- 18 efit Account established under section 15A of 19 the Railroad Retirement Act of 1974. 20 ‘‘(d) DETERMINATION BASED ON ESTIMATES.—De- 21 terminations under this section and sections 2 and 3 of 22 the Raise Wages, Cut Carbon Act of 2019 shall be made 23 on the basis of estimates by the Secretary. To the extent 24 that any such determination for any period is determined 25 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 3966 IH to have been inaccurate, such determination for the subse- 1 quent period shall be appropriately increased or decreased 2 by the amount that the previous determination was less 3 than, or in excess of, the more accurate determination. 4 ‘‘(e) PUBLICATION OF RATE REDUCTIONS.—Any ad- 5 justment under this section of social security tax rates for 6 any calendar year shall be published in the Federal Reg- 7 ister not later than 2 months before the beginning of such 8 calendar year. 9 ‘‘PART II—TAX ON COMBUSTIBLE FOSSIL FUELS 10 ‘‘Sec. 4692. Imposition of tax. ‘‘Sec. 4693. Refunds or credits. ‘‘Sec. 4694. Other definitions and special rules. ‘‘SEC. 4692. IMPOSITION OF TAX. 11 ‘‘(a) IN GENERAL.—There is hereby imposed a tax 12 on any taxable carbon substance sold by the manufacturer, 13 producer, or importer thereof. 14 ‘‘(b) AMOUNT OF TAX.— 15 ‘‘(1) IN GENERAL.—The amount of tax imposed 16 by subsection (a) on any taxable carbon substance 17 shall be the applicable amount per ton of the carbon 18 dioxide emissions potential of such substance, as de- 19 termined by the Secretary in consultation with the 20 Secretary of Energy. 21 ‘‘(2) FRACTIONAL PART OF TON.—In the case 22 of a fraction of a ton, the tax imposed by subsection 23 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 3966 IH (a) shall be the same fraction of the amount of such 1 tax imposed on a whole ton. 2 ‘‘(3) APPLICABLE AMOUNT.— 3 ‘‘(A) IN GENERAL.—For purposes of this 4 part, the applicable amount is— 5 ‘‘(i) for calendar year 2020, $40, 6 ‘‘(ii) for any calendar year following a 7 year which is not a national emissions tar- 8 get attainment year, the sum of— 9 ‘‘(I) the product of the amount in 10 effect under this subparagraph for the 11 preceding calendar year and 102.5 12 percent, and 13 ‘‘(II) the inflation adjustment 14 amount determined under subpara- 15 graph (B), and 16 ‘‘(iii) for any calendar year following a 17 year which is a national emissions target 18 attainment year, the sum of— 19 ‘‘(I) the amount in effect under 20 this subparagraph for the preceding 21 calendar year, and 22 ‘‘(II) the inflation adjustment 23 amount determined under subpara- 24 graph (B). 25 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 3966 IH ‘‘(B) INFLATION ADJUSTMENT AMOUNT.— 1 ‘‘(i) IN GENERAL.—The inflation ad- 2 justment amount for any calendar year 3 shall be an amount (not less than zero) 4 equal to the product of— 5 ‘‘(I) the amount determined 6 under subparagraph (A)(ii)(I) or 7 (A)(iii)(I), as applicable, for such 8 year, and 9 ‘‘(II) the percentage by which the 10 CPI for the preceding calendar year 11 exceeds the CPI for the second pre- 12 ceding calendar year. 13 ‘‘(ii) CPI.—Rules similar to the rules 14 of paragraphs (4) and (5) of section 1(f) 15 shall apply for purposes of this paragraph. 16 ‘‘(C) ROUNDING.—The applicable amount 17 under this subsection shall be rounded up to 18 the next whole dollar amount. 19 ‘‘(D) NATIONAL EMISSIONS TARGET AT- 20 TAINMENT YEAR.—For purposes of subpara- 21 graph (A), a calendar year is a national emis- 22 sions target attainment year if the level of 23 greenhouse gas emissions in the United States 24 for the calendar year does not exceed 20 per- 25 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 3966 IH cent of the level of greenhouse gas emissions in 1 the United States for calendar year 2005 as de- 2 termined by the Secretary in consultation with 3 the Administrator of the Environmental Protec- 4 tion Agency. 5 ‘‘(c) TAXABLE CARBON SUBSTANCE.—For purposes 6 of this subchapter, the term ‘taxable carbon substance’ 7 means— 8 ‘‘(1) coal (including lignite and peat), 9 ‘‘(2) petroleum and any petroleum product (as 10 defined in section 4612(a)(3)), and 11 ‘‘(3) natural gas, 12 which is extracted, manufactured, or produced in the 13 United States or entered into the United States for con- 14 sumption, use, or warehousing. 15 ‘‘(d) SUBSTANCE TAXED ONLY ONCE.—No tax shall 16 be imposed by subsection (a) with respect to a taxable car- 17 bon substance if the person who would be liable for such 18 tax establishes that a prior tax imposed by such section 19 has been imposed with respect to such substance. 20 ‘‘SEC. 4693. REFUNDS OR CREDITS. 21 ‘‘(a) SEQUESTERED CARBON.—Under regulations 22 prescribed by the Secretary, if a person uses a taxable car- 23 bon substance so that the carbon associated with such sub- 24 stance will not be emitted, then an amount equal to the 25 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 3966 IH amount of tax in effect under section 4692(b) with respect 1 to such substance for the calendar year in which such use 2 begins shall be allowed as a credit or refund (without in- 3 terest) to such person in the same manner as if it were 4 an overpayment of tax imposed by section 4692. 5 ‘‘(b) PREVIOUSLY TAXED CARBON SUBSTANCES 6 USED TO MAKE ANOTHER TAXABLE CARBON SUB- 7 STANCE.—Under regulations prescribed by the Secretary, 8 if— 9 ‘‘(1) a tax under section 4692 was paid with re- 10 spect to any taxable carbon substance, and 11 ‘‘(2) such substance was used by any person in 12 the manufacture or production of any other sub- 13 stance which is a taxable carbon substance, 14 then an amount equal to the tax so paid shall be allowed 15 as a credit or refund (without interest) to such person in 16 the same manner as if it were an overpayment of tax im- 17 posed by section 4692. In any case to which this sub- 18 section applies, the amount of any such credit or refund 19 shall not exceed the amount of tax imposed by section 20 4692 on the other taxable fuel manufactured or produced 21 (or which would have been imposed by such subsection on 22 such other fuel but for section 4692(d)). 23 ‘‘(c) EXEMPTION FOR EXPORTS.— 24 ‘‘(1) TAX-FREE SALES.— 25 VerDate Sep 11 2014 02:47 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3966.IH H3966 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 3966 IH ‘‘(A) IN GENERAL.—No tax shall be im- 1 posed under subsection (a) on the sale by the 2 manufacturer or producer of any taxable carbon 3 substance for export or for resale by the pur- 4 chaser to a second purchaser for export. 5 ‘‘(B) PROOF OF EXPORT REQUIRED.— 6 Rules similar to the rules of section 4221(b) 7 shall apply for purposes of subparagraph (A). 8 ‘‘(2) CREDIT OR REFUND.—If— 9 ‘‘(A) any person exports— 10 ‘‘(i) a taxable carbon substance, or 11 [Text truncated for display. 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